M/S Nu Tech Security Printers vs M/S Santhi Agency & Ors.
2010 Latest Caselaw 5801 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%                   Judgment Pronounced on: 21.12.2010

+           CS(OS) No. 408/1989

M/S NU TECH SECURITY PRINTERS                .....Plaintiff


                          - versus -


M/S SANTHI AGENCY & ORS.                     .....Defendant


Advocates who appeared in this case:
For the Plaintiff: Mr. S.S. Sobti
For the Defendant: Mr. D.R. Bhatia

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

1. Whether Reporters of local papers may
   be allowed to see the judgment?                      No

2. To be referred to the Reporter or not?               No

3. Whether the judgment should be reported
   in Digest?                                           No

V.K. JAIN, J. (ORAL)

1. This is a suit for recovery of `20,29,634.55.

Defendant No.2 is a partner of defendant No.1, whereas

defendants No. 5 and 6 are partners of defendants No. 3

and 4. Defendants No. 3 and 4 are also alleged to be the

unit of defendant No.7, wholly owned by it. It is alleged in

the plaint that Government of Nagaland appointed

defendant No.3 as the Organizing Agent of its State

sponsored lotteries and defendants No. 3 to 7 were

appointed as the selling agents for defendants No.3 for such

lotteries. It is further alleged that defendants No. 3 to 7, in

the name of defendant No.3, negotiated with the plaintiff for

printing of lottery tickets and as per instructions of the

sponsorer of the lotteries, defendant No.3 got the tickets

printed from the plaintiff. On the request of defendant No.3,

tickets were delivered by the plaintiff to defendant No.1 at

its Delhi office and the bills for printing were also raised in

the name of defendant No.1. Payments against the bills,

however, were received by the plaintiff from defendant No.1

as also from defendants No. 3 and 4. It is alleged that a

sum of `14,58,250/- is due to the plaintiff from the

defendants towards printing of the tickets. The plaintiff has

claimed that amount along with interest thereon at the rate

of 18% per annum which comes to `5,71,384.55, making a

total of `20,29,634.55.

2. Defendants No. 1 and 2 filed written statement

contesting the suit and took a preliminary objection that

there is privity of contract between them and the plaintiff

since it were defendants No. 3 to 7 who had negotiated with

the plaintiff for printing of lottery tickets and had placed

orders for that purpose. On merits, it has been admitted

that defendant No.3 had appointed defendant No.1 as its

sole selling agent for the State sponsored lottery of the

Government of Nagaland. It is also alleged that since

defendants No.1 and 2 are outside Delhi, they had asked

defendants No. 3 to 7 to get the tickets printed in Delhi at

their own risk and responsibility and the cost of printing

was to be adjusted from the discount and commission, etc.,

which were payable to defendant No.1. It is also claimed in

the written statement of defendants No. 1 and 2 that it was

defendant No.5 who had negotiated with the plaintiff and

placed orders for printing of lottery tickets and had asked

the plaintiff to raise the bills in the name of defendant No.1.

It is also alleged in the written statement that defendants

No. 3 to 7 have already debited the entire bill amount of the

plaintiff in their account and, therefore, they alone are liable

to make payment to the plaintiff. It has, however, been

admitted that the bills for printing of bills were raised in the

name of defendant No.1 though it is claimed that the bills

used to be sent to defendant No.3 and they used to forward

it to defendant No.1 along with the printed lottery tickets.

3. In their written statement, defendants No. 3 to 7

have claimed that they had no dealing with the plaintiff at

any point of time. It is further alleged that defendant No.4

had dealings with the plaintiff only to the extent that certain

payments were made by it on behalf of defendant No.1. On

merits, it has been admitted that defendant No.3 was

appointed as the Organizing Agent for State sponsored

lotteries of Government of Nagaland and it had appointed

defendant No.1 as its sole selling agent. It is further alleged

that it was the responsibility of defendant No.1 to have the

lottery tickets printed and sold and there was no privity of

contract between any of the defendants out of defendants

No.3 to 7 and the plaintiff.

4. The following issues were framed on the pleadings

of the parties:-

          (i)       Whether the suit has been properly
                    instituted in the name of the plaintiff?
                    OPP

          (ii)      Is the suit bad for mis-joinder of
                    parties? OPD

          (iii)     To what amount is the plaintiff entitled
                    and from which defendant? OPP


           (iv)      Is the plaintiff entitled to interest. If
                    so, at what rate and for what period?
                    OPP

          (v)       Relief.

ISSUE NO.1

5. The affidavit of PW-1 Mr. Ashok Shroff shows that

the plaintiff is a registered partnership firm and he is its

registered partner. Ex. PW1/1 is the certified copy of form

'B' issued by Registrar of Firms, Delhi which shows that the

plaintiff is a registered partnership firm since 3 rd October

1986. The certified copy of form 'A' is also available on the

judicial file. Form 'A' being a public document, it can be

proved by filing its certified copy and hence the certified

copy of form 'A' filed by the plaintiff is admissible in

evidence. A perusal of form 'A' shows that Mr. Ashok Shroff

is one of the four partners of M/s Nu-Tech Security Printers.

There is no evidence to rebut the deposition of Mr. Ashok

Shroff in this regard. The issue is decided against the

defendants and in favour of the plaintiff.

6. These issues are interconnected and can be

conveniently decided together. There is no dispute that

plaintiff had printed tickets for State sponsored lotteries of

the Government of Nagaland. The dispute is as to whether

the plaintiff is entitled to recover the charges for printing of

the lottery tickets from defendant No.1 or from one or more

defendants out of defendants No. 3 to 7. The case of the

plaintiff as set out in the plaint is that the order for printing

of the tickets was placed by defendant No.3 and tickets were

printed on its instructions and supplied to defendant No.1

at its Delhi office. There is no documentary evidence of the

order for printing of tickets having been placed by defendant

No.3. Though it has been stated in para 5 of the affidavit of

Mr. Ashok Shroff that as per instructions of sponsorer of the

lotteries, defendant No.3 got the tickets printed from the

plaintiff firm, the affidavit does not disclose the name of the

person who placed order with the plaintiff for printing of

tickets. Defendant No.3 being a partnership firm could have

acted either through any of its partners or though any of its

employees. The failure of the plaintiff to disclose the name

of the person, who placed the order with it for printing of

tickets, becomes important in view of the stand taken by

defendants No. 3 to 7, that none of them had anything to do

with the printing of lottery tickets, which was the sole

responsibility of defendant No.1. Though defendants No. 1

and 2 have claimed in their written statement that the

orders were placed with the plaintiff by defendant No.5,

there is no evidence to prove this allegation.

7. Admittedly, the invoices towards charges for

printing of lottery tickets were raised by the plaintiff in the

name of defendant No.1 Santhi Agency. Ex.PW1/2 to

Ex.PW1/23 are the invoices. None of the invoices contains

any endorsement to the effect that the order for printing of

tickets was placed by defendant No.3. The copies of the

invoices do not purport to have been endorsed to defendant

No.3. The learned counsel for the plaintiff has pointed out

that one invoice, Ex. PW1/24 has been raised in the name

of defendant No.3 M/s. Amrit & Company. However, it does

not bear signature of any person for and on behalf of

defendant No.3 M/s. Amrit & Company. In any case, there

is no explanation as to why out of 23 invoices filed by the

plaintiff, 22 have been raised in the name of defendant No.1

Santhi Agency.

8. Ex.PW1/25 is a letter dated 30th July 1987 written

by the plaintiff to defendant No.1. A perusal of this

document would show that during the discussions in the

presence of Mr. Amrit Chopra and Mr. Suri of defendant

No.3, it was agreed by defendant No.1 that it would make

payment of `3Lacs to the plaintiff by way of three demand

drafts of `1Lac each payable by 20th August 1987, 31st

August 1987 and 10th September 1987, respectively and the

schedule for the balance payment would be sent by 10 th

September 1987. This document clearly shows an

admission of liability on the part of defendant No.1 Santhi

Agency with respect of the charges for printing of lottery

tickets. Ex.PW1/26 is the letter dated 29th March 1988 sent

by the plaintiff to defendant No.1 enclosing therewith the

statement of accounts as on 30th March 1988 and

requesting defendant No.1 to let the plaintiff know how soon

they had intended to clear the outstanding amount of

`14,58,250/-. This document is yet another proof that the

transaction for printing of tickets was between the plaintiff

and defendant No.1. Had that not been the case, there

could be no occasion for the plaintiff to demand the

outstanding amount from defendant No.1. Though the

copies of this letter purport to be endorsed to defendant

No.3 Amrit & Company, no demand was raised with

defendant No.3 for payment of the amount shows as

outstanding in this letter. It is an admitted case that some

payment to the plaintiff was made by defendant No.1.

9. This defendant No.1's own case in the written

statement is that charges for printing of tickets were

adjusted against the commission etc. payable to it by

defendant No.3. This is also their case that the invoices

used to be transmitted to them by defendant No.3. This

averment also indicates that it was defendant No.1 who was

liable to pay charges of printing of tickets. Had the liability

for paying the charges for printing of tickets been that of

defendant No.3, there could be no question of those charges

been adjusted against the commission which was payable

by defendant No.3 to defendant No.1. Ex.PW1/27 is the

letter sent by defendant No.1 to the plaintiff stating therein

that the charges for printing of tickets have already been

paid by it to defendant No.3. This to my mind is another

admission of liability on the part of defendant No.1 since

there could have been no reason for it to make payment of

those charges to defendant No.3, had it not been liable to

pay for the printing of lottery tickets.

10. For the reasons given in the preceding paragraphs,

I am of the view that there was no privity of contract

between the plaintiff and any of the defendants out of

defendants No. 3 to 7. The issues are decided accordingly.

11. It has been stated in the affidavit of Mr. Ashok

Shroff, partner of the plaintiff firm that the defendants had

agreed to pay interest at the rate of 18% per annum in case

there was default in payment of the bills from the date of

drawl. Defendants No. 1 and 2 have not come forward to

contest the suit and have not produced any evidence. I,

therefore, see no reason to disbelieve the deposition of Mr.

Ashok Shroff in this regard and accordingly hold that the

plaintiff is entitled to interest at the rate of 18% per annum

on the outstanding principal amount though only from

defendants No. 1 and 2. The issue is decided accordingly.

ISSUE No.5

12. In view of my finding on the issues, the plaintiff is

entitled to recovery of `14,58,250/- as principal sum and

`5,71,384.55 towards interest from defendants No. 1 and 2.

ORDER

A decree for recovery of `20,29,634.55 with

pendente lite and future interest at the rate of 12% per

annum is hereby passed in favour of the plaintiff and only

against defendants No. 1 and 2.

The suit against defendants No. 3 to 7 is dismissed

with no order as to cost. Decree sheet be drawn

accordingly.

(V.K. JAIN) JUDGE DECEMBER 21, 2010 Ag